Chinese shares were lower on Wednesday as its central bank again devalued the yuan, following Tuesday's record cut.

The People's Bank of China fixed the daily guiding rate for the currency down 1.6% to 6.3306 against the dollar.

The Shanghai Composite fell by 0.4% to 3,911.67 points in early trading while Hong Kong's Hang Seng dropped 1.2% to 24,197.56.

The 2% cut by the national lender on Tuesday sent shockwaves through the global markets.

The surprise decision came along with the announcement that the central bank would in future set the guidance based on overnight global market developments, making it more market-based.

The International Monetary Fund said it was "a welcome step" allowing market forces to have a greater role in determining the exchange rate.

Wall Street impact

China's central bank tried to calm market concerns on Wednesday saying that there was no basis for a sustained depreciation of the yuan given global and domestic economic conditions.

Overnight, Wall Street had reacted to Beijing's surprise decision, leading to a negative start to morning trading across Asia.

The region's biggest stock market, Japan's Nikkei 225 index, was down 1.2% to 20,472.90 points.

South Korea's benchmark Kospi index fell by 1.2% to 1,964.15 points.

Also, feeling the aftershocks of China's surprise move, the Australian S&P/ASX 200 fell by 0.5% to 5,445.10 points.

Shares in the country's biggest bank, the Commonwealth Bank of Australia, were halted from trading as the lender announced a A$5bn capital-raising in order to meet stricter regulatory requirements.

On Wall Street on Tuesday, the Dow Jones fell 212.33 points, or 1.21%, to 17,402.8, and the S&P 500 lost 20 points, or 0.96%, to 2,084. The Nasdaq end down 65, 1.27%, at 5,036.79.